A dispute with a supplier or a customer is a conflict between independent parties, you resolve the problem and move on. A dispute with your co-shareholder is different for several reasons that make it significantly more complex.
You are legally bound to them through the articles of association. You cannot simply terminate a contract and switch suppliers. Exiting an SRL or excluding a shareholder are complex legal procedures, not unilateral actions.Most shareholders start an SRL with enthusiasm and the best of intentions. Few think, at that moment, about what happens if the relationship deteriorates.
And yet, shareholder disputes are among the most frequent and most costly legal situations in Romanian business. Not because people act in bad faith, though sometimes they do, but because a growing business naturally generates tensions around strategic direction, profit distribution, each party’s contribution, and remuneration.
When these tensions cannot be resolved through dialogue, the consequences can be severe, decision-making deadlock, paralysis of the company, significant financial losses, and sometimes the complete destruction of a profitable business.
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The company is the hostage of the conflict. As long as the dispute is unresolved, the company operates under uncertainty or does not operate at all. Customers, suppliers, and employees are affected regardless of who is right.
Emotions complicate legal decisions. Shareholders are often friends or relatives, which means legal decisions are emotionally charged and often irrational from the perspective of real economic interests.
Information is asymmetric. If your co-shareholder manages the company and you do not, they know far more about the actual state of the business than you do. This asymmetry can be exploited to your disadvantage.
The most common causes of shareholder disputes
No two disputes are identical, but certain patterns appear repeatedly.
Disagreement on strategic direction
One shareholder wants aggressive growth and to reinvest profits. The other wants stability and dividend distribution. Neither is objectively wrong, but if the articles of association do not provide a mechanism for resolving these disagreements, the company enters a deadlock.
Contributions perceived as unequal
One shareholder believes they work harder than the other and that remuneration does not reflect this reality. The other believes their contribution, financial, relational, or in expertise, is undervalued. These perceptions are often subjective but generate real resentment that accumulates over time.
Lack of transparency and access to information
The shareholder managing the company delays providing financial information to the other shareholder or provides incomplete information. The non-managing shareholder does not know what is really happening in the company. Lack of transparency generates suspicion, sometimes justified, sometimes not.
Dividend distribution blocked
The majority shareholder or the managing shareholder blocks dividend distribution, either by reinvesting profits without the other’s agreement or by creating artificial expenses that reduce distributable profit. The minority shareholder feels excluded from the fruits of the business they helped build.
Major changes without all shareholders’ agreement
One shareholder initiates significant changes, a major investment, a loan, a change of business object, without obtaining the other shareholders’ agreement or without following the procedures set out in the articles of association.
Your rights as a shareholder — the general picture
Without going into the technical details of each right, understanding the general picture of a Romanian SRL shareholder’s rights is important for correctly assessing your position in a dispute.
As a shareholder of an SRL you have patrimonial rights, the right to dividends, the right to a share of the net assets upon dissolution, and the right to transfer your shares. You also have non-patrimonial rights, the right to information and oversight of the company’s activities, the right to vote at the general assembly of shareholders, and the right to challenge GAS resolutions considered illegal or abusive.
The strength and limits of these rights depend crucially on two documents that you probably did not read carefully enough when you signed them: the company’s articles of association and the shareholders’ agreement if one exists.
These documents can extend or limit your rights beyond the legal minimum, which is why the first step in any shareholder dispute is a detailed analysis of these documents by a lawyer.
Available legal options — from negotiation to exclusion
Shareholder disputes can be resolved through several legal mechanisms, with varying degrees of conflict and cost.
Negotiation and mediation
This is always the first option to explore, not out of naivety, but for practical reasons. A conflict resolved through negotiation costs incomparably less than one resolved in court, takes less time, and allows both parties to control the outcome.
Direct negotiation works sometimes. Other times a mediator is needed, a neutral third party who facilitates dialogue without imposing a solution. Mediation is underused in Romania relative to its real potential in shareholder disputes.
Restructuring the shareholder relationship
Sometimes the conflict does not require one shareholder to exit, but rather a clear redefinition of each party’s roles, responsibilities, and rights. This can be done through amendment of the articles of association or through a detailed shareholders’ agreement.
This solution works when the conflict is based on ambiguity and lack of communication, not on bad faith or fundamentally incompatible values.
Shareholder withdrawal
A shareholder can withdraw from the company under the conditions provided by law or the articles of association. Withdrawal involves determining the value of the shares and payment by the company or the remaining shareholders.
The value at which withdrawal occurs is often itself a source of conflict, the departing shareholder wants to be paid at the real value of the business, not the nominal value of the shares.
Shareholder exclusion
Exclusion is a judicial procedure through which a shareholder can be removed from the company for serious grounds provided by law, fraud, use of company assets for personal benefit, obstruction of the company’s normal functioning.
It is a complex procedure, with strict conditions and uncertainty regarding the outcome. It is not an instrument to be used at the first sign of conflict, but a last resort when other options have been exhausted.
Judicial dissolution
When the conflict between shareholders makes it impossible for the company to function normally and no other solution is viable, any shareholder can ask the court to order the judicial dissolution of the company.
Dissolution means the end of the company, assets are liquidated and distributed to shareholders. It is a drastic solution, but sometimes the only realistic one when the relationship between shareholders is irreparably broken.
Mistakes that make the conflict worse
From practical experience, there are several mistakes that shareholders in conflict make repeatedly and that aggravate the situation rather than resolving it.
Unilateral action without legal basis. A shareholder blocks the company’s accounts, changes authorised signatories, or physically excludes the other shareholder from the office without any legal procedure. These actions are illegal, generate civil and criminal liability, and transform a resolvable conflict into full litigation.
Mixing personal and company assets. In a dispute, every transaction between a shareholder and the company becomes subject to challenge. If assets were mixed previously, informal loans, personal expenses charged to the company, the situation becomes extremely complex.
Informal communication about the conflict. Emails, messages, public statements about the conflict can become evidence in court. Everything you communicate during a conflict with or about your co-shareholder must be filtered through the perspective that it may be used against you.
Ignoring early warning signs. Shareholder conflicts do not explode out of nowhere, they build over time. Ignoring early warning signs and postponing difficult conversations turns resolvable problems into major crises.
Making important legal decisions without counsel. Signing an exit agreement, accepting an offer to buy back your shares, or initiating legal proceedings without specialised legal advice can block valuable options or create disadvantages that are difficult to recover from later.
What to do in the first 48 hours of an acute conflict
If your relationship with your co-shareholder has deteriorated suddenly, you discovered they made a major decision without you, transferred funds in a suspicious way, or are trying to exclude you from the company, the first 48 hours are critical.
Do not act impulsively. Do not send aggressive emails, do not block access to the office, do not withdraw funds from the company’s accounts. These actions may be illegal and can significantly weaken your legal position.
Collect and secure relevant documents, the articles of association, the latest financial statements, bank statements, significant contracts, and relevant correspondence.
Consult a specialist lawyer immediately. A shareholder dispute can quickly escalate into legal proceedings with major financial consequences. The earlier you act with correct legal advice, the better the options available to you.
This article is for general informational purposes only and does not constitute legal advice. Shareholder disputes are among the most complex legal situations in commercial law, every case has its own particularities and requires a strategy tailored to the specific situation. Contact a lawyer before making any important decision.
Frequently Asked Questions
Can I be forced to sell my shares if the other shareholders no longer want me in the company? Not directly and unilaterally. Excluding a shareholder is a judicial procedure with strict statutory conditions, not a decision the other shareholders can make by simple vote. If the articles of association do not provide for special forced exit clauses, the minority shareholder’s legal protection is significant.
My co-shareholder manages the company and will not give me access to the financial statements. What can I do?The right to information and oversight is a legal right of every shareholder, regardless of their ownership percentage. If the administrator refuses to provide information, there are legal mechanisms to compel the company to do so. This is often the first step in the escalation of a shareholder dispute.
We are two shareholders with 50% each. Neither of us can make decisions without the other. What do we do? A 50-50 structure without clear deadlock resolution mechanisms is one of the most problematic ownership structures. Options include negotiating a decision protocol, restructuring the shareholding, introducing a third arbitrating shareholder, or, if the relationship is irreparably broken, judicial dissolution. There is no simple solution, but there are solutions.
How long does a shareholder exclusion procedure take? A judicial exclusion procedure at first instance can take between 1 and 3 years, depending on complexity and the court’s workload. If the decision is appealed, the procedure is extended further. This is why judicial exclusion is considered a last resort ,not a first solution.
My co-shareholder has been taking money out of the company without my agreement. What can I do? It depends on the nature of the transactions, whether they were approved by GAS resolution, whether there are contracts behind them, whether the administrator exceeded the limits of their mandate. If there are indications of fraud or use of company assets for personal benefit, there are both civil and criminal legal mechanisms available. Consult a lawyer urgently with the relevant financial documents.
Facing a dispute with your co-shareholder and want to understand your options before making a wrong move?
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